UK watchdog says Wirecard making progress on addressing concerns

[June 29, 2020]  By Huw Jones and Iain Withers

LONDON (Reuters) - The Financial Conduct Authority said on Monday Wirecard was addressing the British watchdog's concerns but its restrictions on the collapsed German payments company's services would remain for now.

Several UK fintech firms have been forced to suspend services following the FCA's restrictions on Wirecard, leaving hundreds of thousands of accounts blocked.

"We cannot lift the restrictions without reassuring ourselves that the firm has been able to satisfy all our concerns for example that all clients' money is safe. We hope to be able to issue an update soon," the FCA said in a statement on Monday.

The FCA its teams have been working with Wirecard, and other international and UK authorities, over the weekend.

"We have seen good progress by the firm in meeting the conditions we set," the watchdog said.

Subprime lender Morses Club said on Monday it had had to freeze online accounts provided by its digital service U Account.

The headquarters of Wirecard AG, an independent provider of outsourcing and white label solutions for electronic payment transactions is seen in Aschheim near Munich, Germany April 25, 2019. REUTERS/Michael Dalder/File Photo

Industry forum the Emerging Payments Association (EPA) said the FCA freeze on Wirecard in Britain should be lifted as soon as possible as moving to alternative firms takes months and with significant costs.

"We predict dozens of corporate failures, hundreds of job losses and significant reductions in tax payments, unless it is removed right away," EPA said in a letter to the FCA.

"Unless the suspension is reversed soon, and within the next 24 hours, we predict significant and irreparable damage to the UK's reputation for having a thriving, balanced fintech industry supported by an understanding and enabling regulator."

Martin Lewis, founder of consumer website moneysavingexpert.com, said there is a reasonable expectation that the hundreds of thousands of consumers affected will get access to their money again by Wednesday or Thursday.

(Reporting by Huw Jones and Iain Withers, editing by David Evans)

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